How Do You Work With a Property Management Company?

5 Replies

How to Work With a Property Management Company, Empire Industries?

I am in Houston also and only have single family houses.  It is not hard enough to justify using a company.  I thing I have heard of you though.  Are you a member of the RICH club?

Just really screen any PMC contract you're considering.  Watch out for all kinds of fees.  And don't believe them when they brush off your concerns about these fees.  I'd hire my own maintenance people, write my own contract and look for a real estate agent willing to do it on the side for a flat fee.  No rent, no money.  Vacancies?  No money until rent is coming in again.

Too many PMCs profit when there are problems.  They hire their own maintenance people at inflated rates, they charge you to supervise any work that gets done by their own maintenance people, they charge you for collecting late fees, for evictions, for finding the next tenant.  They profit by mis-managing your property.

I highly suggest taking control of your PM contract and hire your own.  There are real estate agents out there who would be happy to collect 10% each month from a tenant that they screened well.  Easy extra money.  In fact, offer them more than 10% if you need to sweeten the deal, because a PMC will cost you much more.  But you won't know it up front.

Definitely tell them they have to call you before they can spend any of your money - whether it's an "emergency" or not.  If you self-manage, your tenant can call you in the middle of the night for an emergency - so can a PMC.  But, they won't.  In my experience.  

My daughter hired a PMC and they didn't call her until they'd run through thousands of dollars of reserve funds - to ask her for more.  So many "emergencies," including trimming a once-beautiful tree on a weekend (higher rates) because the tenant was afraid a limb might fall on her dog.  The tree was fine.  That's just one example of an "emergency."

I had the same experience with a PMC 30 years earlier in another state.  

There are good PMCs out there.  But, go in skeptical is my advice.  Go over the contract with a fine-tooth comb, and strike clauses that don't sound right.  And better yet, write up your own contract, find your own handymen and hire someone like a realtor to find tenants, and just coordinate your handyman, etc.

You'll have to manage your manager, so consider whether or not you'd rather just do it yourself and save the money and potential extra headaches.

For what it's worth.


Thanks for your post.  You confirmed why I self-manage.  If done right (who's going to do it better than yourself) a person can still be out on the golf course almost 7 days a week.  

17 years working with property management companies.  1 exactly as @SueKelly describes, their entire profit model was based upon charging huge fees every month on minor and unnecessary maintenance expenses.  I got out of that geography and removed myself from that company.  Next is my number 1 reason for still being in real estate.  8% and they know me well enough to not spend over my comfort level without a discussion.  As I've referred several owners to them they have gone so far to act as general contractor on a major rehab and offer design consultation.  We get along quite well and rarely have words regarding unexcused expenses.   The primary reason for my response is my most recent property management relationship.  10% yes, but it took a few months to set expectations.  Expenses haven't been a major concern with this one, but I finally had to tell her Merry Christmas, last October.  I said I didn't want to hear from her unless it was an emergency.  She was WAY over communicating.  Thus far my approach has worked.  Money comes in the 15th of every month and I haven't heard from her but once to tell me her assistant had moved on.   Set expectations up front, watch expenses and property management is the way to go.  It's not only piece of mind and a layer of liability protection, but I've seen them getting higher rents in my area than I would have gotten myself on craigslist.

@Cliff Odom

 Yes I am a member of RICH club and we also speakers with them regularly. We actually got to speak after the Mayor of Houston last year when she was a guest speaker there. We talk about issues investors have with their properties that most people dont want to take the time to learn until they are standing in front of a judge or hearing. Like Fair Housing laws and all the 7 (Soon to be 8) protected classes and Texas Property Code Laws etc..

I agree with most things on this post thread being an investor myself and coming up owning homes and apartment buildings, however I will say that the biggest problem with most management companies is that they were never investors and do not have a real business plan for themselves and for their investor clients.

I feel our job as a management company is to make the owner have a profitable business that gives them returns on their investment, but more importantly I feel our job is to make sure the owner does not get sued or violates a law that they never took the time to learn and get them into legal hot water. 

I think most of these posts are from dealing with people that have a bad business model that is not customer centered but rather self centered. If you find the right company with the right mindset I think in general it can be a better experience.

I will also say the owner has a responsibility to educate themselves on what type of business they are getting into, some owners do not understand that when you buy a house there are going to be things that happen and costs associated with it. Similar to buying a car and never thinking you are going to have to change the oil or the tires. That to me is someone that got into this business and did not educate themselves really on what to expect.

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